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Alabama Motor Vehicle Dealer (Designated Agent) Bond

What is an Alabama Motor Vehicle Dealer (Designated Agent) Bond?

As a licensing requirement, car dealers and related businesses in the state of Alabama must post a surety bond in the amount of $25,000. The surety bond is mandated by the Alabama Department of Revenue’s Motor Vehicle Division for new and used motor vehicle dealers, designated agents, rebuilders, reconditioners and wholesalers.

There is an updated surety bond requirement for Alabama dealers and recyclers that goes into effect October 1, 2020. The bond amount will change from $25,000 to $50,000.

Get Your Alabama Motor Vehicle Dealer Bond

Motor Vehicle Dealer Bond - For Used Car Dealers

$50,000 Bond

Automotive Dismantler & Parts Recycler Bond
Motor Vehicle Dealer Bond - For Dealers of New Vehicles

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Why is an Alabama Motor Vehicle Dealer Bond Required?

The surety bond protects those who may be damaged by the dealer’s violations or non-compliance with applicable language in Sections 32 and Section 40 of the Code of Alabama 1975.

In the event that a third party sustains financial losses due to the dealer’s violations, the surety company may be liable for reimbursement up to the full bond amount of $25,000. The bond principal provides indemnity to the surety company for any losses paid out to third parties. This bond is continuous until canceled by the surety company by providing 60 days advance written notice to the Alabama Department of Revenue.


Motor Vehicle Dealer Bonds And Getting Your Alabama Business License/Registration

The following is an overview of key motor vehicle dealer licensing requirements in Alabama.

  • Completed Dealer License Application
  • Dealership Signage per specifications
  • $25,000 surety bond
  • Liability insurance
  • Payment of license and application fees as required
  • Additional items may be needed and exact requirements may vary based on applicant, license type or obligee discretion. Please see obligee and state links in the Other Helpful Information and Links section below or contact the obligee directly for more information.


Additional Alabama Motor Vehicle Dealer Bond Resources & Links

Alabama Department of Revenue Motor Vehicle Division

Alabama Department of Revenue Motor Vehicle Forms